HONOLLULU — For the third time in two decades, city officials are seeking to make residential use out of a large parcel of vacant city land in Kailua.
Two Honolulu City Council members plan to introduce a resolution on Tuesday, June 4, proposing to largely give the 10-acre site, valued at $10.5 million, to the state Department of Hawaiian Home Lands (DHHL) so the agency can develop about 20 single-family homesteads for beneficiaries.
If successful, the plan would dispose of an unused property in the Kalaheo Hillside area that the city has owned for 63 years, and establish the first DHHL homestead in Kailua.
Two prior attempts, however, have failed. And some adjacent neighbors previously have opposed development of housing on the parcel despite it being zoned for single-family housing.
Council member Esther Kia‘aina, whose district includes Kailua, has authored the resolution with Council Chair Tommy Waters.
Kia‘aina said Friday that the proposal represents a historic opportunity for the city to establish the first-ever DHHL community in Kailua and to honor Prince Kuhio, who was pivotal in establishing the homestead program and the City and County of Honolulu.
“Through this city land transfer, we hope to address the critical need for housing on O‘ahu while helping our Native Hawaiian community,” she said in a statement. “Establishing a Hawaiian homestead in Kailua will ensure that Native Hawaiians can continue to live and thrive in this special place.”
Honolulu Mayor Rick Blangiardi endorsed the proposal.
“This initiative is consistent with the city’s firm commitment to address O‘ahu’s affordable housing crisis by partnering with other organizations that share the responsibility and desire to facilitate the availability of affordable housing for Native Hawaiians — a community significantly impacted by the rising costs of land on O‘ahu,” he said in a statement.
The effort by Kia‘aina and Waters represents a third try in the past two decades by city officials to have the land once slated for an elementary school to become housing.
The city bought the property from Kaneohe Ranch in 1961 to provide land for an envisioned Kalaheo Elementary School. At the time the city was in charge of building schools.
In the years since new-school development was transferred to the state Department of Education, plans for Kalaheo Elementary were abandoned because four existing elementary schools in the area — Aikahi, Kailua, Kainalu and Mokapu — were sufficient.
With no need for a school on the site, the state Board of Education approved the city’s desire to dispose of the parcel, which has views of the ocean and borders 18 homes along with the Kailua Assembly of God church below roughly 200 acres of preservation land.
In 2006, city leaders identified the site as one of a dozen city properties suited for low-income or homeless transitional housing. But that effort, which envisioned contributing the land to a public-private development partnership at little cost to produce 60 multifamily homes, was never realized despite motivation to help address a critical need for affordable housing.
Another plan was floated in 2015 to sell the property for fair market value to a private developer via sealed bids. The Council’s then-chair, Ernie Martin, introduced a resolution to seek bidders, but that effort fizzled as well.
Martin’s plan encountered pushback from area residents who expressed concerns with issues that included traffic and land stability.
Ikaika Anderson, who at the time was the area’s representative on the Council, reported that an overwhelming message from Kalaheo Hillside residents was that the city shouldn’t sell the land to the highest bidder for residential development.
“The community opposes development and any sale,” Anderson said at the time.
Hawaii’s affordable housing crisis has only gotten worse over the past two decades. At the same time, DHHL has a lot of capital to expand its homestead development work.
The state Legislature in 2022 appropriated $600 million for the agency to mainly develop homesteads for beneficiaries, who must be at least 50 percent Hawaiian to directly receive 99-year land leases for $1 a year from DHHL but must pay for or build their own houses.
About 28,700 applicants are on DHHL’s wait list for homesteads, and the agency aims to use the $600 million to produce 2,180 lots. Most of these lot development projects are large-scale, such as 450 lots at East Kapolei II on O‘ahu, 380 lots at Laiopua Villages on Hawai‘i Island and 161 lots at Pu‘uhona on Maui.
DHHL is pursuing some small projects as well. They include 20 lots in Ho‘olehua on Molokai and 25 lots on 3 acres of preservation-zoned land in Hawai‘i Kai being acquired from Kamehameha Schools.
If the Kailua land deal is approved, DHHL could establish its first homestead community in the Windward O‘ahu community.
“This conveyance is much more than the passing of land from one government agency to another; it is about giving our ohana the opportunity to root themselves in a community for generations to come,” DHHL Director Kali Watson said.
“Transferring this land from the city to DHHL is a priceless gift that will create lasting benefits for our ohana,” Watson said in a statement. “This partnership paves the way for our beneficiaries to build a community in Kailua, underscoring the tangible outcomes achievable through collaborations like this.”
The resolution proposes to mainly give DHHL the land as an important public purpose.
City property tax assessors value the land at $10.5 million. The resolution proposes a sale price of $495,323. This amount, according to the resolution, represents the city’s cost for previously exchanging land in Ewa with DHHL as part of the city’s rail project.
